United StatesUNITED STATES
Securities and Exchange CommissionSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended JuneSeptember 30, 2005.

OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        ACT OF 1934

          For the transition period from _______________ to _______________.

          Commission File Number 1-7978

Black Hills Power, Inc.
Incorporated in South Dakota       IRS Identification Number 46-0111677

625 Ninth Street
Rapid City, South Dakota 57701

Registrant’s telephone number (605) 721-1700

Former name, former address, and former fiscal year if changed since last report

NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

    Yes              No  

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

    Yes              No   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

    Yes              No   

As of July 29,October 31, 2005, there were issued and outstanding 23,416,396 shares of the Registrant’s common stock, $1.00 par value, all of which were held beneficially and of record by Black Hills Corporation.

Reduced Disclosure

The Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

TABLE OF CONTENTS

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BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)

        The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

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BLACK HILLS POWER, INC.
CONDENSED BALANCE SHEETS
(unaudited)

        The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

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BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

        The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

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BLACK HILLS POWER, INC.

Notes to Condensed Financial Statements
(unaudited)
(Reference is made to Notes to Financial Statements
included in the Company’s 2004 Annual Report on Form 10-K)

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*gas in MMbtu’s

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ITEM 2.         RESULTS OF OPERATIONS

Retail Services Group

Electric Utility

The following tables provide certain operating statistics:

Electric Revenue
(in thousands)

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Megawatt Hours

We established a new summer peak load of 401 megawatts in July 2005. We established our winter peak load of 344 megawatts in December 1998.

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Three Months Ended JuneSeptember 30, 2005 Compared to Three Months Ended JuneSeptember 30, 2004. Electric utility revenues increased 63 percent for the three month period ended JuneSeptember 30, 2005, compared to the same period in the prior year. Firm commercial residential, industrial and contract wholesaleresidential sales increased 6 percent, 9 percent, 18 percent and 1216 percent, respectively. Wholesale off-system sales increased 5 percent with a 12 percent increase in average price received, partially offset by a 6 percent decrease in megawatt-hours sold. Cooling degree days, which is a measure of weather trends, were 15145 percent higher than the same period in the prior year. Wholesale off-system sales decreased 7 percent with a 32 percent decrease in megawatt-hours sold, partially offset by a 38 percent increase in average price received. The decrease in wholesale off-system megawatt-hours sold was primarily due to the unscheduled outage of our Neil Simpson II power plant in July and August of 2005, which resulted in fewer megawatt-hours being available for sale.

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Electric operating expenses increased 324 percent for the three month period ended JuneSeptember 30, 2005, compared to the same period in the prior year. Higher operating expenses were primarily the result of a $0.6$5.3 million increase in fuel and purchased power costs. The increase in fuel and purchased power was due to a $0.4$4.8 million increase in purchased power, resulting fromwhich includes $2.8 million of additional purchase power costs to cover the outage of NSII, as well as a 1240 percent increase in average price per megawatt-hour, partially offset by an 8a 5 percent decrease in megawatt-hours purchased, and a $0.2 million increase in fuelpurchased. Fuel costs increased due to a 1426 percent increase in megawatt-hours generatedaverage cost partially offset by a 7an 11 percent decrease in average cost.megawatt-hours generated. Megawatt-hours produced through coal-fired generation increaseddecreased while higher cost gas generation was utilized in the three months ended JuneSeptember 30, 2005, as we incurred scheduled2005. Purchased power and gas generation were utilized for firm load demand and peaking needs due to unscheduled plant outages during the second quarter of 2004. Prevailing gas prices have made it more economical for us to purchase power for our peaking needs, rather than generate energy from our gas turbines.and warmer weather. The increase in operating expense was also affected by increased power marketing legal expense, and compensation costs partially offset by lower maintenance costs.and corporate allocations.

Income from continuing operations increased $1.6Net income decreased $4.0 million primarily due to increased revenues, lower maintenance costs and lower interest expense, due to the pay down of debt, partially offset by increased fuel and purchased power costs, legal expense, compensation costs and compensation costs.corporate allocations, partially offset by increased revenues and lower interest expense, due to the paydown of debt.

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SixNine Months Ended JuneSeptember 30, 2005 Compared to SixNine Months Ended JuneSeptember 30, 2004. Electric utility revenues increased 54 percent for the sixnine month period ended JuneSeptember 30, 2005 compared to the same period in the prior year. Firm commercial, residential and contract wholesale sales increased 4 percent, 5 percent, 8 percent and 63 percent, respectively. Wholesale off-system sales increased 15 percent due to an 11 percent increase in average price received and a 4 percent increase in megawatt-hours sold. Cooling degree days for the sixnine month period were 15157 percent higher than the same period in 2004 and heating degree days were 35 percent lower than the same period in 2004. Wholesale off-system sales increased 5 percent due to a 19 percent increase in average price received partially offset by a 12 percent decrease in megawatt-hours sold.

Electric operating expenses increased 713 percent for the sixnine month period ended JuneSeptember 30, 2005, compared to the same period in the prior year. Higher operating expenses were primarily the result of a $3.0an $8.4 million increase in fuel and purchased power costs. The increase in fuel and purchased power was due to a $3.1an $8.0 million increase in purchased power, resulting fromwhich includes $2.8 million of additional purchase power costs to cover the outage of NSII, as well as a 1223 percent increase in average price per megawatt-hour, and a 3 percent increase in megawatt-hours purchased,partially offset by a nominal1 percent decrease in fuelmegawatt-hours purchased. Fuel costs increased $0.4 million due to a 65 percent decreaseincrease in average cost, partially offset by a 41 percent increasedecrease in megawatt-hours generated. Megawatt-hours produced through coal-fired generation increaseddecreased while higher cost gas generation was utilized in the sixnine months ended JuneSeptember 30, 2005, as we incurred scheduled2005. Purchased power and gas generation were utilized for firm load demand and peaking needs due to unscheduled plant outages during the second quarter of 2004. Prevailing gas prices have made it more economical for us to purchase power for our peaking needs and increased off-system sales, rather than generate energy from our gas turbines.warmer weather. The increase in operating expense was also affected by increased power marketing legal expense, and compensation costs and corporate allocations, partially offset by lower maintenance costs.

Income from continuing operations increased $0.9Net income decreased $3.1 million primarily due to increased fuel and purchased power costs, legal expense, compensation costs and corporate allocations, partially offset by increased revenues, lower maintenance costs and lower interest expense, due to the pay down of debt, partially offset by increased fuel and purchased power costs, legal expense and compensation costs.debt.

Other Event

In July 2005, the electric utility experienced an unscheduled outage at its 90 megawatt Neil Simpson II power plant. That plant is expected to be out of service for the month of August. To meet our forecasted needs, we have obtained supplemental purchased power and additional natural gas supplies, which will negatively affect third quarter 2005 financial results. The economic impact of this outage is expected to be in the range of $2.5 million to $3.0 million pre-tax, taking into account increased fuel costs, higher purchased power expenses and reduced coal sales.

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SAFE HARBOR FOR FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q includes “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including the risk factors described in Items 1 and 2 of our 2004 Annual Report on Form 10-K filed with the SEC, and the following:

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New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise.

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ITEM 4.         CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act)) as of JuneSeptember 30, 2005. Based on their evaluation, they have concluded that our disclosure controls and procedures are adequate and effective to ensure that material information relating to us that is required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods.

Internal Control Over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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BLACK HILLS POWER, INC.

Part II – Other Information

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BLACK HILLS POWER, INC.

Signatures

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 15,November 14, 2005

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EXHIBIT INDEX

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